The Key Criterion for the Consolidation of the Separate Financial

question 18

Multiple Choice

The key criterion for the consolidation of the separate financial statements of entities is:

• A) substance over form;
• B) control;
• C) the existence of contracts for the supply of goods between the entities;
• D) capacity of the accounting systems to facilitate the necessary combination process;

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle.

Discounted Note

A type of debt instrument that is sold or redeemed for less than its face value but whose actual value matures to the full face amount at a later date.

Face Value

The nominal or original value stated on a financial instrument, such as a bond or stock certificate.

Gross Pay

The total amount of money earned by an employee before any deductions or taxes are taken out.